Infrastructure investors rounded out 2009 with $10.7 billion in commitments, or about 57 percent less than the total capital raised for the asset class in all of 2008, according to data compiled by San Francisco-based placement agent Probitas Partners.
The fundraising was also far more concentrated among a select few winners, with New York-based Alinda Capital Partners attracting $2.5 billion, or 23 percent of the total for its second fund, and Australia’s Macquarie Group scooping up $2.6 billion, or 24 percent of the total, across four funds in market, according to the data.
Infrastructure fundraising in 2009: down but not out
In November, for example, both firms won commitments of $40 million each from a pool of 30 funds-in-market vying for fund capital from the $12 billion State Universities Retirement System of Illinois. Alinda also won the only infrastructure commitment awarded by the $206 billion California Public Employees’ Retirement System, at $300 million.
Alinda’s and Macquarie’s fundraising success was a rarity: overall, as nearly 100 funds worldwide vied for approximately $110 billion of infrastructure capital, few fund managers were likely to be thrilled with their $10.7 billion fundraising take-ins for the year.
In 2008, by contrast, Probitas estimated a total of $24.7 billion in global fundraising for infrastructure, which has typically attracted investors like pensions, insurance firms and endowments.
“Infrastructure was certainly down in 2009, but it was not a secular problem with infrastructure. Every market within private equity was down with the sole exception of secondaries,” said Kelly DePonte, a partner at Probitas Partners, who compiled the figures. The figures exclude funds that Probitas is currently placing.
Infrastructure fundraising turned out to be a roller-coaster throughout the year. About $1.6 billion was raised in the first quarter of 2009, followed by $2.4 in the second quarter. The third quarter saw a downturn to $1.3 billion, followed by a rally of $5.4 billion in the fourth quarter, according to Probitas’ data.
DePonte credits the fourth quarter uptick to rising stock market, which gave some investors confidence. He cautioned, though, the fear of a double-dip in the market is still making many investors weary about putting their money into any illiquid asset class like infrastructure or private equity.
“There’s a lot of real hesitation around that issue,” said DePonte.